BioMarin Pharmaceutical Inc. BMRN reported a loss of 22 cents per share in the second quarter of 2015 (including stock-based compensation expense), narrower than the Zacks Consensus Estimate of a loss of 53 cents but wider than the year-ago loss of 5 cents per share.
However, quarterly revenues of $250.5 million shot up 30.6% from the year-ago period and beat the Zacks Consensus Estimate of $218 million. Revenues were primarily driven by solid growth of Vimizim, Naglazyme and Kuvan.
The Quarter in Detail
Vimizim contributed $53.9 million to total revenue, up 6.5% sequentially. Commercial patient demand grew 29% sequentially.
Kuvan revenues increased 28.1% year over year to $60.1 million. This increase is attributable to increasing patients and high rates of compliance. Naglazyme sales increased 13% year over year to $111.1 million benefiting from a major order in Latin America.
However, this trend is not likely to continue in the coming quarters. BioMarin receives royalties from its partner Sanofi SNY on Aldurazyme. Aldurazyme royalties (excluding transfer revenues) amounted to $23.5 million, down 3.7% year over year.
Firdapse revenues came in at $3.7 million, down 19.6% year over year.
Research and development (R&D) expenses increased 46.6% to $157.9 million. Selling, general and administrative (SG&A) expenses were up 49.1% from the year-ago quarter to $101.5 million.
BioMarin continues to progress with its pipeline. The company expects a response from the FDA on its experimental Duchenne muscular dystrophy treatment, drisapersen by Dec 27, 2015. Meanwhile, a CHMP opinion is expected in the first half of 2016 followed by a final decision from the European Commission in the third quarter of 2016. A positive response from the FDA would allow the company to launch drisapersen in early 2016 in the U.S.
During the quarter, the company had reported encouraging data from a phase II study on vosoritide (15 micrograms/kilogram/daily dose) for the treatment of achondroplasia. A 30 micrograms per kilogram daily dose is being evaluated currently. BioMarin is looking to enter discussions with regulatory authorities regarding pivotal studies with the 15mcg dose – the company is looking to start the pivotal studies in the first half of 2016.
2015 Outlook Maintained
BioMarin continues to expect total revenues of $850 million to $880 million in 2015. The Zacks Consensus Estimate of $883 million is above the company’s guidance range. While Vimizim sales are expected in the range of $200 million to $220 million.
Naglazyme revenues are expected in the range of $315 million to 340 million. The company continues to expect Kuvan sales in the range of $210 million to $230 million. Negative currency movement is expected to impact revenues by about $30 – $40 million.
The company continues to expect SG&A and R&D expenditure in the range of $360 million – $395 million and $610 million – $640 million, respectively.
Our Take
BioMarin’s second quarter results were solid with the company beating on the top – and bottom-line. However, results benefited from the Naglazyme order in Latin America – a situation not expected to be repeated in the remainder of the year. The company continues to work on boosting Vimizim sales. Reimbursement and expansion in additional territories including Turkey and Japan will drive sales.
Meanwhile, the company has an important regulatory event coming up with the FDA expected to decide on drisapersen’s approval status by year end. The company also has multiple pipeline-related news and several data readouts lined up for the rest of the year.
BioMarin carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Ligand Pharmaceuticals Inc. LGND and AMAG Pharmaceuticals, Inc. AMAG each sporting a Zacks Rank #1 (Strong Buy).
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